For IVP, Twitter investment came from the gut, and quickly

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In late 2008, Institutional Venture Partners general partner Todd Chaffee had never heard of Twitter. Two months later, it was one of the company’s biggest backers.

Speaking at Venture Capital Journal’s Venture Alpha conference Thursday, Chaffee described how a then-junior Institutional Ventures employee, Jules Maltz, came back from a December event organized by the Churchill Club, an organization that holds talks in the San Francisco Bay area. He had heard Evan Williams, co-founder of Twitter talk and was impressed, but couldn’t get through the throngs to talk with him afterwards.

Chaffee realized that Union Square Ventures partner Fred Wilson, whom he knew in part through a shared investment in research company comScore, was a member of Twitter’s board of directors, and called him up. “Yeah, we don’t need any more money,” he recalled Wilson saying. But Chaffee persisted, and Wilson arranged an introduction.

Institutional Ventures met with Williams and Biz Stone, another Twitter co-founder, in January 2009. Chaffee recalled dinner on a Wednesday night, due diligence on Thursday, and a deal coming together that Friday. It closed the following month.

“We understood it wasn’t just a weird social network,” Chaffee said. “We understood it was a platform.” He said ultimately, the decision to invest “came from the gut.”

Twitter has the potential to become a $50 billion company, Chaffee said at the Venture Alpha event.